For any company, be it a small, medium or large enterprise, the product is the treasure trove. It is the product that keeps the company going, the production in place, the sales stable and the profits increasing. Moreover, it is the product that gives rise to marketing, which has now become one of the prime quaternary sectors in recent times. Since the whole idea of business and trade revolves around products, it won’t be unusual to say that the market of a company emerges from the products or services they deal in.
Therefore, it is this product that has to be analyzed, its potential gauged and its growth predicted, in order to determine the long-term strategies for your company. The BCG Matrix or the Boston Consultancy Group’s product portfolio Matrix does exactly the same. Also known as the Growth/Share Matrix, the BCG Matrix analyzes the product portfolio of your company, helping you to make informed decisions about whether to develop a new product, increase the production of another product, discontinue a product or invest in a new product. This analysis considers business growth, market growth and relative market share of the product or service and helps you form a comprehensive plan regarding your product portfolio.
The BCG Matrix analyzes your product broadly in terms of four different quadrants: Star, Dog, Cash Cow and Question Mark. These quadrants are identified on the basis of their scale of market growth and market share- from high to low across both the axes. Stars indicate high competition with high growth rate and high market share whereas Dogs are less profitable due to low growth rate and low market share. Cash cows are most profitable because of high market share, although their growth rate is low. Question Mark, on the other hand, indicates uncertainty, understood through low market share but high growth rate.
Keeping this basic concept in mind, BCG Matrix becomes very important for digital marketing, mainly because of its influence that impels the channelizing of various digital marketing strategies. A BCG analysis shows which products should be given more importance and how and in what field are they growing well. This is helpful to formulate strategies for marketing products online. For example, a cash cow product is the one that yields high profits due to its high market share. In such a case, when you know the market is not growing and your revenue is from market share, an ideal digital marketing strategy would be to focus on increasing customer engagement and ensure customer satisfaction. The strategy would thus be customer-oriented, using social media for feedback and customer satisfaction, content marketing for retaining customers and their loyalty, as well as various customer engagement strategies across online platforms.
On the other hand, for a star product yielding profits through a high market growth, promoting new products through video, email and search engine marketing seems to be the best choice. Thus, BCG Matrix paves the way for an informed and profit-yielding digital marketing strategy by telling you about how the products are performing in the market. The job of the marketer now is to know from this knowledge under what condition will the product perform better in the market.
Digital Marketing has become that form of marketing which one should opt for if you’re looking to grow your business in today’s world. Use the BCG matrix to understand what medium will be best suitable for which product or service. You can also get in touch with us to help you plan the same.